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Forum Post: A Bold New Labor Call for a ‘Maximum Wage’

Posted 8 years ago on Nov. 6, 2012, 12:16 p.m. EST by SparkyJP (1646) from Westminster, MD
This content is user submitted and not an official statement

The national leader of one of America’s feistiest unions is aiming to expand the economic fairness debate. He’s proposing a cap on incomes at the top that rises only if incomes at the bottom rise first.


By Sam Pizzigati

On paper, minimum wage workers are making exactly what they made in July 2009, the last time the minimum wage bumped up. In reality, minimum wage workers are making less today than they made last year — and the year before that — since inflation has eaten away at their incomes.

And if we go back a few decades, today’s raw deal on the minimum wage gets even rawer. Back in 1968, minimum wage workers took home $1.60 an hour. To make that much today, adjusting for inflation, a minimum wage worker would have to be earning $10.55 an hour.

In effect, minimum wage workers today are taking home almost $7,000 less over the course of a year than minimum-wage workers took home in 1968.

Figures like these don’t particularly discomfort our nation’s most powerful. We live in tough times, their argument goes. The small businesses that drive our economy, we’re informed, can’t possibly afford to pay their help any more than they already do.

But the vast majority of our nation’s minimum wage workers don’t labor for Main Street mom-and-pops. They labor for businesses that no average American would ever call small. Two-thirds of America’s low-wage workers, the National Employment Law Project documented last month, work for companies with over 100 employees on their payrolls.

The 50 largest of these low-wage employers are doing just fine, even with the Great Recession. Over the last five years, these 50 corporations — outfits that range from Wal-Mart to Office Depot — have together returned $175 billion to shareholders in dividends or share buybacks.

And the CEOs at these companies last year averaged $9.4 million in personal compensation. A minimum wage worker would have to labor 623 years bring in that kind of pay.

So what can we do to bring some semblance of fairness back into our workplaces? For starters, we obviously need to raise the minimum wage. But some close observers of America’s economic landscape believe we need to do more. A great deal more.

Count Larry Hanley among these more ambitious change agents. Hanley, the president of the Amalgamated Transit Union, sits on the AFL-CIO executive council, the American labor movement’s top decision-making body. Earlier this month, Hanley called for a “maximum wage,” a cap on the compensation that goes to the corporate execs who profit so hugely off low-wage labor.

This maximum, if Hanley had his way, would be defined as a multiple of the pay that goes to a company’s lowest-paid worker. If we had a “maximum wage” set at 100 times that lowest wage, the CEO at a company that paid workers as little as $15,080 — the annual take-home for a minimum wage worker — could waltz off with annual pay no higher than just over $1.5 million.

During World War II, Amalgamated Transit Union president Hanley points out, President Franklin D. Roosevelt called for what amounted to a maximum wage. FDR urged Congress to place a 100 percent tax on income over $25,000 a year, a sum now equal, after inflation, to just over $350,000.

Congress didn’t go along. But FDR did end up winning a 94 percent top tax rate on income over $200,000, a move that would help usher in the greatest years of middle-class prosperity the United States has ever known.

Throughout World War II, FDR enjoyed broad support from within the labor movement — and the general public — for his pay cap notion. Now’s the time, Hanley believes, to put that notion back on the political table. We need, he says, “to start a national discussion about creating a maximum wage law.”



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[-] 2 points by stevebol (1269) from Milwaukee, WI 8 years ago

Raise the minimum wage and quit @&%$ing around.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

This is a way to close the inequality gap that has been tried and tested before. It also helps pay off the national debt. This action is what brought us the 1950's; a time when the middle class flourished.

[-] 2 points by TrevorMnemonic (5827) 8 years ago

HR 5901

Increase minimum wage to 10 dollars an hour. Call your congressmen!


[-] 2 points by stevebol (1269) from Milwaukee, WI 8 years ago

Not enough. At least $12.

[-] 1 points by TrevorMnemonic (5827) 8 years ago

I agree with that. But I'll back this until the 12 dollar plan in on the table.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

I agree that the minimum wage is a joke that no one could live on; but this proposal goes the other way and caps income by increasing the top tax rate at 94% after $xx; or by allowing incomes at the top to rises only if incomes at the bottom rise first. This is an attempt to curb inequality.

[-] 1 points by Coyote88 (-24) 8 years ago

Actually the New Deal prolonged the depression and it was the war that pulled us out of it. That is why Roosevelt instigated the war with Japan.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

I've heard that view, but I don't buy it. I've also heard that Roosevelt himself was flying one of the zeros that bombed Pearl Harbor, and don't buy that either.

As far as the New Deal; I'm sure that putting people back to work would create a huge drag on the economy. Hell, if jobs were created today, it would probably drive us clean off the economic cliff.


[-] 1 points by poindexter (8) 8 years ago

I think it would be far more realistic to go for a minimum income. No politician or businessman is going to go for income caps. There are simply no mechanisms in place that will allow them and certainly no will to change the economic basis of the country to provide for these caps. At the end f the day it's these dreamer kinds of proposals that make us look like kooks.

Creating a minimum income is far more realistic because it is politically based and doesn't require any structural change to the economic system. We have in place any number of programs that provide income for certain segments of the population but these are always couched in term of temporary help for those segments.

That's where we simply make an adjustment to the thinking involved here and remove the 'temporary' aspect. If we took all the programs that already exist and add a bit more we could make the presentation that there will always be members of any society that will always need help. Even the most hidebound Republican would not argue against that. What we are proposing is to remove the stigma of financial help and create a permanent base that people can move in and out of as their circumstances ebb and flow.

You have to present it in a way people can get their heads around. The case could be made it's like legal alcohol, a certain percentage of the population will be alcoholics but the vast majority will not, same with a minimum income, some need it but most will not. People can understand that and will lose their fear of actually providing for 'some' people because it becomes a finite thing, not an open ended horror show of millions of useless drones sucking up resources.

Actually, now is a great time to get this done because if Obama has done nothing else he has created a class awareness and hammering through something like this would ease a lot of 1 percent tension and frankly. a lot of 99% tension as well.

This is absolutely doable.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

If you research history, you'll find that this "dreamer kinds of proposal" has been implemented in the past, and became law for 20 yrs, so it's not something new. Of course the elite and their sponsors (congress) will fight it, but they brought it on themselves through greed. The middle class will push back, when pushed to the limits.


[-] 1 points by stevebol (1269) from Milwaukee, WI 8 years ago

The lower class can make their own demands. WE work these low paying jobs. WE don't need to wait for BS to trickle down from above. Make minimum wage about $12 an hour. People that can't pay that much shouldn't be in business and besides there's always work to be had off the books.

[-] 1 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

It makes sense to have a maximum income cap - then extend that to tie into the minimum income level. Makes sense that the top as well as the bottom is regulated to stop massive imbalance. Would likely also do much to restrain wild fluctuations of inflation/deflation.

[-] 2 points by SparkyJP (1646) from Westminster, MD 8 years ago

Exactly. I think that it would eliminate these huge boom and bust cycles that we currently have. We may only grow at 3-6% instead of 6-8%, but the economy would be more stable and predictable. Right now we only have about 2% growth. I feel that stability is much better than wild fluctuations.

[-] 2 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

True - stability - it may not be sexy to some - so what.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

It's definitely more sustainable for the long run and gives the economy a stronger base. The trick would be fighting our bought congress to make the change. Even if they did, they'd water it down so much that it would become meaningless; and about 64,000 pages long, full of loopholes. We're just not represented.

[-] 1 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

We need to do more in the way of representing ourselves - in the new(?) recent(!!!) example of the Move to Amend state by state campaign.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

U R Right !! Citizen United needs to be overturned ! I think the root of the problem extends much deeper though and ALL external money should be removed from campaigns and have 100% federally funded elections and debates. Congress has proven they can't be trusted and are easily bought. If they don't owe someone else, maybe they'll start representing us.

[-] 2 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

And then we also need to address removing conflict of interest.

And clean - one subject at a time legislation - no free rides for pork or anything else. Clarity of purpose.

And so much more - that really only the people pushing the issues will make it happen.

[-] 1 points by SparkyJP (1646) from Westminster, MD 8 years ago

There is so much to fix, I question if it's possible. Perhaps if the people had executive power over the 3 branches of government to guide there decisions, we could make some headway. Like this:


[-] 1 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

The fundamental change must be getting the public to stay involved between elections.

[-] 0 points by Brython (-146) 8 years ago

I agree - doctors should not be charging thousands of dollars an hour when the average American makes ten or fifteen an hour.

[+] -4 points by Nowsmichigan (-310) 8 years ago

Get unions out of the private and federal sector